(1)
ATL Claim: The article doesn’t present any earnings data after 2008
and ignores changes since the financial crisis

Facts: We present
earnings data from 1996 to 2011. We also
check for trends. As shown in the figure
below, the earnings premiums in recent years are within historical norms.

Earnings declined for both law degree holder and bachelor degree
holders, and law degree holders maintained their relative advantage.

We note in the article that the most recent college and law
graduates in our sample graduated in 2008.
This is because the Census Bureau reports educational attainment at the
start of each Panel and the most recent panel started in 2008. Each panel tracks earnings for several years.

We separately analyze earnings premiums for young law degree holders
and bachelor's degree holders, and do not find evidence that the earnings premium
has compressed.

(2)
ATL Claim: The article relies on averages (or means) and doesn’t
provide any information relevant to students who attended lower ranked law
schools

Brian Tamanaha made the same misrepresentation. We have already responded
to it here. The Washington Post reported that the averages-only claim is "false."

(3)
ATL Claim: The article doesn’t
present after-tax earnings

Facts: We present
both pre-tax and after-tax present value figures, and discuss both the private
benefit of the law degree to the student and the public benefit to the federal
government in the form of higher tax revenue.

The discussion of
taxes appears on pages 42 to 44 of the article, but we will relieve the
suspense: the Federal government takes about a third of the extra
earnings.

(4)
ATL Claim: The article
doesn’t consider the cost of tuition

Facts: The article presents both benefits (higher earnings) and
costs (such as tuition). We include a
range of annual tuition values between 0 and $60,000 in our Internal Rate of Return
calculation in Table 10 on page 68 of the article. The Internal Rate of Return is typically
between 10 and 25 percent (in real terms, net inflation), depending on tuition and the point in the
distribution where the law degree holder falls.

We list present value figures prior to deducting tuition in the
article so that the cost of the degree—tuition and fees less grants and scholarships—can
readily be subtracted from the value of the degree—the earnings premium. We
also cite to ABA data about law school tuition, both before and after
scholarships and grants.

Mr. Mystal is correct that the $1 million figure is pre-tax and
pre-tuition—the article says as much. However, after deducting taxes, and
tuition, and even close to the bottom of the distribution, it appears that a
law degree is very often a profitable investment.

How profitable varies from person to person. There are surely a few individuals who do not
benefit at all or even do worse. If we
had a way to identify these unlucky people before law school we would encourage
them to avoid law school. Judging from student loan default rates, this
is a relatively rare outcome. Further, income
based repayment of loans should substantially mitigate this downside, even as
it makes it difficult for us to nail down exactly how much a given person pays
for law school.

(5)
ATL Claim: The article simply
“assumes” that law degree holders who don’t practice law benefit from a law
degree

Facts: We don’t assume. We measure
earnings for all law degree holders in sample, regardless of eventual
occupation. The data suggests that the
earnings premium is significant, even including those who do not practice
law.

(6)
ATL Claim: The article
compares apples to oranges and fails to control for differences between
bachelor’s and law degree holders

Facts: We control for many demographic, academic,
and socio-economic characteristics other than law school attendance that
predict earnings. In a supplemental analysis using data from the National
Education Longitudinal Study, we incorporate additional control variables and
tests for ability sorting and selection.